In the Czech Republic a difference between average interest rate for consumer loans in a traditional banking market and P2P market is more than 1 percentage point. The main reason for this difference is lower costs thanks to online processing and modern technologies that effectively link supply and demand.
Personal loan from banks can be obtained for 8.37% p.a. The same indicator at Zonky, the Czech largest platform connecting individual investors and loan applicants, is 7.16% p.a.
Lower interest rate in P2P market is possible due to higher effectivity, not a higher risk. That is also clear from the data of unpaid loans – in the average 4.21% of loans from banks are overdue, while only 1.97% at the Zonky platform.
CzechTrade team Calgary